vol. 2

companies, experts and pioneers from a forest province

Located on the eastern border of the EU, North Karelia made a far-reaching choice in 2011. The region decided to bring its energy consumption down

and increase the share of renewable energy sources from less than two-thirds to over 80% by the year 2020. The goal is to completely eliminate the use of fossil fuels in heating. In just under ten years, the aim is to produce a surplus of electricity — renewably.

Support and a broader perspective for making such decisions came from the Koli Forum, which was held in September 2011. Koli theses state that the bioeconomy is a key instrument in assuming responsibility for meeting international climate goals. In addition, forests, other renewable natural resources and the bioeconomy will become a key economic driver and provide a competitive edge for Europe in the decades to come.

The region’s strategic decision to commit to bioeconomic goals has triggered a positive chain reaction. The world’s first commercial-scale pyrolysis oil production plant is being built adjacent to the Fortum Corporation’s Joensuu bio-power plant. In the pyrolysis process, wood biomass is converted into a liquid, thus forming a fuel for energy applications and heavy-duty motors. The raw material is collected from the region’s forests and refined into a bio-oil, as a by-product of district heating and electricity fed into the national power grid. The facility and its fuel management will create dozens of new jobs, primarily in rural areas. What could possibly be more appropriate for the forest capital of Europe, where, in addition to research and education, a large part of Europe’s production of forestry machines is concentrated?

Energy is but one part of the bioeconomy, where regional researchers and businesses are eagerly searching for new solutions. In Uimaharju, the Enocell pulp mill is finalizing the modification of one of its production lines. The modified line will produce dissolvent pulp – a sustainable fibre which will not be used for making paper but as a substitute for cotton in the textile industry.

Joensuu is fast becoming one of the hottest centres of bioeconomy research in Europe – an international network hub that knows how to measure forest reserves, masters biomass production, harvesting and logistics and is an expert

on the raw material properties of wood. In Joensuu, over 500 bioeconomy experts at various research institutes—the latest addition being the Energy and Resources Institute (TERI), which is headquartered in India—are building joint research entities. All this means that companies are not alone in their efforts to solve problems encountered in developing new products and processes, as Joensuu’s unique, multidisciplinary Centre of Forest Bioeconomy is ready to tackle development challenges with them. An extensive international partner network also provides a development resource that very few operating environments are able to offer.

The greatest expectations for pyrolysis oil are for its use as a raw material for the chemical industry. Bio-oil can be refined into such products as diesel fuel for

cars. Imagine what kind of chemical compounds produced during tree growth and the pyrolysis process all those wood scientists might actually find in this tar-like liquid. The University of Eastern Finland (UEF), which is launching an international multidisciplinary Wood Material Science degree programme, will shed light on this. The university’s ambitious goal is to ‘learn everything about wood’.

Wood is also of interest to players not traditionally associated with the forest industry. Ample forest reserves and the assured availability of raw materials make North Karelia an ideal development environment for new processes and for ramping up production to full scale. Logistics work smoothly, the necessary infrastructure is in place, co-operation between industry players is exceptionally seamless and the region is close to the gateway to the Russian market. We are proud of the fact that regional players are, also through their own choices, committed to staying at the forefront of the bioeconomy. North Karelia is a region that practices what it preaches, offering a natural operating environment for companies committed to the bioeconomy.

Joensuu, 4 February 2013

Timo Tahvanainen, Joensuu Science Park Ltd.

Editorial

Pilot area practices what it preaches

Joensuu is fast becoming one of the hottest centres of

bioeconomy research in Europe

2

In this issue

14 16 18

20222426

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0604

Kareline® composites – environmentally-friendly and recyclable

Iivari Mononen - putting service in pole position

Riikonen built a service entity from a network

Putting it all together like tongue and groove

A toast to success straight from nature

KME Oy provides warmth and employment

Lots of room for innovation talk

Source of pride

Fortum bio-oil refinery turns the world’s attention to Joensuu

Time for a new approach to demolition

a Brand name product in five years

3

a brand name productin five years

Aatelitalo Oy Founded in 2007 In-house employees: 25 Turnover: EUR 4 million (2011) Production facilities in Lehmo, sales office in Vantaa North Karelian subcontractors are used to provide, for example, furnishings, windows, roofing, roof trusses

www.aatelitalo.fi

4

“It was a real kick start,” explains Managing Director Ville Kokkonen of Aatelitalo Oy, describing the company

launch. Aatelitalo, which began its operations five years ago, has made prefabricated wood houses into an

industrial end product. The demand for prefab houses is growing steadily, which is also Aatelitalo’s aim.

Ville, Kalle and Antti Kokkonen are determined brothers. They stopped working on construction projects in Southern

Finland because contracting work just did not seem like a good fit for family life. Ville Kokkonen explains that, on several occasions, he considered whether it would be possible to actually build houses from the ground up inside a nice and dry indoor facility. His love for his home region, North Karelia, also weighed heavily in his thought process. Moving to Southern Finland for work was not a very appealing prospect. The threesome came up with an inspired solution. Home would stay in North Karelia and the houses would be completely prefabricated at the plant in Kontiolahti and shipped down to the high-growth centres of the Helsinki Metropolitan area.

Building a home made easyAbove all, people want building their own home to be an easy process. According to Kokkonen, few people in the Helsinki Metropolitan area build their own homes. The prefabricated house trend came to Finland from Sweden, where prefabricated houses accounted for over 50% of the entire single-family home market by the mid-2000s.

“When we started up in 2007, prefabricated houses accounted for just over 10% of the homes built. Now, we’re seeing around a 35% market share, with steady growth.”

Aatelitalo was founded on the threshold of a declining market. In retrospect, Kokkonen believes that his company managed to escape the effects of the 2008 financial crisis - its order backlog for prefabricated houses quickly reached ten months, after getting off to a flying start. The big backlog helped the company sail through the worst of the crisis.

“By the end of 2008, nothing was happening on the sales front, but right from the beginning of 2009, the market took off.”

Two by twoAatelitalo has an approximately 2,200 m2 production facility in Lehmo, Kontiolahti. The latest 1,000 m2 expansion was completed in 2011. The facility currently produces some 30 prefab houses a year. There are 11 different models, ranging from 80 m2 to 200 m2 in size.

All house models have a standard width of nine metres. The interiors of the wood houses are fully completed at Lehmo: all wallpaper, tiles, appliances, furnishings and sauna fittings are already in place.

The houses are then transported to their respective sites in two 4.5-metre sections. The foundation and roof structures are completed before the house arrives by special transport. Foundations are made on a pre-compacted gravel pad. The roof and gables are built on the foundation, where they sit until the house is delivered. The roof also serves as a protective cover for the foundation.

The entire house is erected in approximately four hours. Except for the fireplace and a few finishing touches, the house is ready to occupy. Hot water radiant floor heating allows for a wide range of heating solutions. According to Kokkonen, some type of air source heat pump is installed in almost every house.

Personalisation and powerThe company’s goal is to maintain controlled growth. Ville Kokkonen anticipates that the plant will build as many as 38 Aatelitalo houses next year. In a couple years, there are plans to increase the production volume to 50 houses.

“A lot depends on market growth. As a small operator, we cannot afford to be hitting our heads against a brick wall – we have to earn a profit very quickly.”

An increase in production requires new subcontractors as well as hiring new in-house staff. Getting up to speed within the delivery chain and learning how the company works,

however, take time, and Kokkonen does not want to rush things. “It’s expensive to fix the work we’ve already done - this just gobbles

up our profit margin. And we have to invest in the quality of our entire delivery chain.”

Aatelitalo’s industrial production phases are highly standardised. However, it is still possible to make numerous changes to meet the customer’s individual needs.

“Our ability to customise our product is a clear competitive advantage.”

Aatelitalo Oy has manufactured wood prefabricated houses since 2007. Since that time, the share of the prefabricated house market has steadily risen. Managing Director Ville Kokkonen (left) and production manager Kalle Kokkonen believe that this steady growth will continue.

Photos: Fabrik and Aatelitalo 5

Time for a new approach to demolition

Demolition is traditionally seen as simple work -

education and references are not generally asked for.

Long crippled by shady business practices, the industry has

remained unappreciated, with the biggest loser being the

environment. Deal In Oy Managing Director Petri Hynninen,

who has worked in the business for over ten years, has

grown tired of the lack of discipline. He wants to roll up

his sleeves and become an industry reformer.

The result of a EUR 500,000 investment and two years of

development, the MC1 mass calculation program was launched in 2012. The mass calculation program is used to calculate and mass electronic drawing files.

The digital program makes it possible to effectively monitor demolition and construction waste and other materials. Both costs and environmental considerations are made transparent. The program provides a bill of quantity as well as precise information on the volume of waste coming from a given site, sorted into various waste types. In the planning phase, the property owner receives precise data on the materials found at the demolition or renovation site. This data can be effectively utilised in estimating waste and renovation costs.

“We can plan and provide guidelines on the reuse of materials right up front.

This provides us with advance information on what shipping arrangements to make and the load quantities we’re working with. If we need an environmental permit for demolition, we set aside enough time to get one. Thanks to the calculation and automatic comparison of waste quantities handled, we can monitor almost all demolition sites, without needing additional resources,” explains Deal In Oy Managing Director Petri Hynninen.

Entering the international stageHynninen’s innovation has been well received on the market, with an export product in the works. In the beginning of 2012, the MC1 mass calculation program received the European Business Award for the Environment at the national level. Hynninen joined the Minister of Economic Affairs’ delegation to Canada.

Deal In Oy Company specialising in the environmental management of the demolition and renovation industry Founded in 2008 Headquarters: Joensuu In-house employees: 5 The MC1 mass calculation program assists in observance of the Waste Act, Waste Tax Act, Land Use and Building Act and Environmental Protection Act and decrees. Was granted Young Innovative Company status by Tekes in 2012

www.dealin.fi

6

The demoliTion indusTry in Finland

The demolition industry in Finland is fragmented. Some of the approximately 70 companies in the industry operate nationally, while others are locally-based, one-person enterprises. This is a major business – the size of Finland’s demolition and renovation market is rising into the hundreds of millions of euros.

Petri Hynninen served as the prime architect, when the Finnish Demolition Association (FDA) was founded in the autumn of 2012. The FDA conducts industry research and works to standardise contract and operating principles. FDA’s mandate also includes acting as a lobby for the demolition industry and monitoring industry trends. In addition to improving the image and educational requirements of the industry, Hynninen feels that organising it as a whole is a necessity and an effective way to prevent illegal activity.

”We have to improve the reputation, profile and educational requirements of the demolition industry. Our industry demands specialised expertise, which highly professional companies want to further develop.”

“There are only winners in This process!”

Petri Hynninen is an entrepreneur. He is also a father of six who puts the environment first and foremost. The lack of care taken at the expense of the environment horrifies Hynninen.

Fortunately, legislators have finally woken up – the aim of Finland’s new Waste Act is to significantly enhance waste recycling by the year 2016. According to an EU directive, by the year 2020 70% of all demolition and construction waste must be reusable or recovered. This is a challenging, but attainable goal.

”We have a solution that makes it possible to meet the requirements of the new Waste Act. The accuracy of mass calculation meets the targets set in the EU directive. Success requires further research in material recoverability and eliminating legal hurdles.”

Hynninen feels that Finland is on the right track to preventing illegal activity in

the construction sector. Loopholes must be closed in the fight to

preserve the environment and prevent abuses. As things stand now, any party ordering demolition work to be done can get out of honouring their environmental responsibility by hiding behind the legal clauses of a contract.Hynninen wants this party to be held liable.

”When someone awards a bid for demolition work to Company X, whose bid was considerably lower than any of the others, warning bells should be going off. Not only the demolition company, but also the party commissioning the work should be held accountable for any violations committed,” states Hynninen.

”There are only winners in this process. The effective recycling of materials and taking care of the environment are ultimately in everyone’s best interests.”

The establishment of export channels continued in Singapore, where Deal In employed a local representative. In Finland, the piloting of the mass calculation program was launched together with, among others, Senate Properties and Finnish Indoor Air Centre Ltd. Municipal building oversight is also interested in the new tool.

The management of material flows during the demolition phase is just one application of the mass calculation program, which offers many more uses. Hynninen shares his vision:

“The mass calculation program can be made into application for, just to name one example, a Windows environment. A private person can create and maintain construction and remodelling data on their own house electronically and in real time. When a need to verify something comes up later—perhaps when selling the house—the required data is just the push of a button away.”

Photos: Fabrik and Deal In

The mass calculation program takes worksites from the age of paper drawings to the digital world. The monitoring of demolition and construction waste as well as various materials is enhanced, while costs and environmental considerations are made transparent.

The aim of Finland’s new Waste Act is to significantly enhance waste recycling by the year 2016. Deal In Oy and Managing Director Petri Hynninen accepted the challenge by developing the new MC1 mass calculation program.

7

Fortum’s Regional Director Timo Partanen is not only busy, but also a proud and happy North

Karelian. At the beginning of the year, his employer of many years—Fortum—made a truly unusual decision, even by global standards: Finland and Joensuu beat out Sweden in an investment competition. Fortum is investing approximately EUR 30 million in the world’s first biofuel plant to be integrated with a combined heat and power (CHP) plant.

“I’m proud to be part of a project, whose goal is a sustainable future and carbon dioxide-free energy production. I’m happy to be working for a company—a pioneer in bioenergy—that brings jobs and investment to North Karelia.”

Metso, UPM and VTT Technical Research Centre of Finland worked in co-operation with Fortum to develop and conceptualise the new technology. The research was part of the Tekes (Finnish Funding Agency for Technology and Innovation) Biorefine programme. In addition to this, the Ministry of

Employment and the Economy granted an EUR 8.1 million subsidy to the investment.

Fluidised bed technologyPartanen explains the phases prior to construction of the bio-oil refinery, dating back to the end of the 2000s, when the Joensuu power plant switched to

fluidised bed combustion. In practice, this change meant increasingly transitioning from peat combustion to the use of forest-based fuels. Forest-based fuels account for approximately 60% of the raw materials used, peat 40%. In a medium-sized combined heat and power (CHP) plant, oil is now only marginally used in production.

“Since that change, customers of Joensuu’s district heat network have had it good: the tax on fossil fuels and emission rights pricing haven’t put as much of a strain on bills as, for example, in the major coastal cities.”

Fortum procures its wood fuel within an approximately 100 kilometre radius around Joensuu.

Construction of the bio-oil refinery, which is

integrated with Fortum’s Joensuu power plant, is

proceeding according to plan: slated for completion

at the end of 2013, the refinery will produce a maximum

of 50,000 tonnes of bio-oil a year. Forest chips and

other wood biomass are used as the raw materials.

Joensuu won this highly desired investment – the area

offers top expertise in bioenergy and strong support

throughout the entire region.

Fortum bio-oil refinery turns

the world’s attention to Joensuu

“This is a win for Finland and Joensuu,”

exclaims Fortum Regional Director Timo

Partanen.

Forest-based fuels account for

approximately 60%

8

Fortum is building the world’s first bio-oil production plant to be integrated with a CHP power plant at its Joensuu facility. Slated for completion at the end of 2013, the plant will produce a maximum of 50,000 tonnes of bio-oil, which the company wants to sell to new customers. In the pyrolysis process, wood biomass is converted into liquid form, which is used as fuel for energy and heavy-duty motors.

Photos: Johanna Kokkola 9

Bio-oil BeaTs The Black gold oF oil sheiks

The bio-oil plant will turn forest chips and wood biomass into oil using a technique called fast pyrolysis. Fast pyrolysis involves an extremely rapid heating of biomass to approximately 400-600°. Organic substances contained in the biomass are released in the extreme heat to form gases. After a rapid cooling, the pyrolytic gases are condensed into a fluid, i.e. bio-oil.

Bio-oil can be produced using just about any type of biomass. In Joensuu, Fortum uses primarily domestic wood-based raw materials, such as forest residue chips. Fortum Regional

Director TImO PARTANEN explains that the procurement chain is currently being restructured to comply with the Renewable Energy Sources (RES) directive. National legislation related to the directive is currently being drafted in the Finnish Parliament.

“In short, this is a question of keeping the origin of wood fully verifiable. The requirement ensuring that the form of land use never changes is also related to verification. Forests must always be used as forests. “

The oil produced by the bio-oil plant replaces conventional heavy fuel

oil. The price of bio-oil is also very competitive with oil imported from the middle East.

“The purchase price of bio-oil can be higher than heavy fuel oil. But, because you don’t have to pay any fossil fuel taxes or emission rights fees for heating, the overall cost is more economical.”

The bio-oil produced can be used by Fortum itself or sold to other customers interested in using bio-oil. Bio-oil is a raw material that, in the future, will be refined into such products as low-sulphur marine gas oil.

Fortum Oyj Finnish energy company focusing its operations on the Nordic countries, Russia, Poland and the Baltic countries

Company operations include electricity and heat production, sales and distribution

Fortum’s Joensuu power plant is a medium-sized CHP plant, with a fuel power of approximately 200 MW

In North Karelia, Fortum also manages the Uimaharju Enocell bark boiler and turbine, whose steam is sold to Enocell and the electricity it produces to the national power grid

Fortum also remotely monitors the UPM Joensuu Plywood Mill power plant

Fortum directly employs approximately 70 people in Joensuu

There are approximately 11,000 employees in the entire corporation

Fortum’s turnover for 2011 totalled EUR 6.2 billion

www.fortum.com

Victory for the regionFortum’s investments are focused on the utilisation of renewable energy. In Joensuu, Fortum is looking even further into the future with construction of its bio-oil refinery – the company wants to be profiled as an operator that is prepared to move in new directions in a big way. In Joensuu, all contributing factors favour investment.

“We had an existing power plant, which was a good fit for the new technology. Another favourable factor is the excellent availability of raw materials. The Joensuu region boasts top expertise in bioenergy – Science Park, University of Eastern Finland, Finnish Forest Research Institute (Metla), North Karelia University of Applied Sciences. With the support of the Regional Council, JOSEK, the City of Joensuu and the entire region, the atmosphere in Joensuu couldn’t be better.”

The pyrolysis oil production line is being built in the existing back yard of the power plant. It will have a specially designated raw materials receiving building, from which wood will be taken to the dryer and then to the actual pyrolyser flanking the boiler.

Photo: Fabrik

More wood, more workFortum currently uses approximately 300,000 solid cubic metres of energy wood at its Joensuu power plant each year. The production of bio-oil is expected to nearly double the amount of raw materials needed. According to Partanen’s calculations, some 70-80 new jobs would be created in raw material procurement. At present, Fortum’s employment effect on the forestry sector—including harvesting and transport—is well over 100. The bio-oil plant will also provide dozens of direct jobs in, for example, maintenance and service. There are approximately 70 existing Fortum employees working in Joensuu.

The new bio-oil plant has attracted a great deal of national and international attention. Joensuu has now established itself as an attractive investment location.

400–600°C

10

“We’ve done the right things and done them right,” says John Deere

Forestry Oy factory manager, Janne Haapasalo. Deere & Company has

invested tens of millions of euros in Joensuu since the beginning of the

2000s. The reason is clear: the location, expertise and attitude in Joensuu

are all just right. >>>

John Deere Forestry Oy Factory Manager Janne Haapasalo (top) and director Jussi Malmi.

Photo: Fabrik

Sou

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prid

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John Deere Forestry Oy World’s leading manufacturer of CTL (cut-to-length) forestry machines Employees: approx. 700 Plant in Joensuu, product development in Tampere Production capacity: 10 forestry machines a day Export share: approx. 90% of total production Key export regions: Nordic countries, Central Europe and Russia Supplier network with approx. 100 companies, with around ten in North Karelia

www.johndeere.com

John Deere’s Joensuu plant is capable of producing 10 forestry machines a day. Exports account for approximately 90% of the company turnover. The Nordic countries, Central Europe and Russia are key export areas. The company has invested heavily in Joensuu throughout the 2000s.

12

In 2003, the city of Joensuu anxiously awaited to see whether Deere would base its forestry machine production

in Filipstad, Sweden or right there at home. Joensuu emerged victorious – thanks to its attitude. Finns are good listeners. The plant employees showed that they were ready to adopt the right kind of approach to efficiency and work.

Since then, it has been attitude that carried the company through all the economic ups and downs. In the summer of 2012, Joensuu received another long-awaited tooling facility. The approximately EUR 8 million investment also covered welding robots and changes to the production layout.

Movers and shakersEach year, some 3,000 cut-to-length type forestry machines are sold throughout the world. John Deere’s share of that pot is approximately 40%. Deere’s Joensuu plant is capable of producing ten forestry machines a day.

The company’s own core processes are robot welding, machining, painting, assembly and testing. Expertise is gained through product development and marketing.

Deere directly employs a staff of approximately 700 in Finland. Of these employees, 250 work in Tampere, which is the location of the company’s R&D, among other functions. Approximately 400 employees work at the Joensuu plant. Retail dealerships located throughout Finland also employ

staff. Through a strong supplier network of around one hundred vendors, the manufacture of Deere forestry machines offers employment to numerous smaller companies.

“It’s been easy to make changes happen at the Joensuu plant – our people there are extremely committed,” says factory manager Janne Haapasalo.

When Haapasalo talks about expertise and commitment, he’s not just paying lip service.

“Finnish expertise is based on a solid basic education, whether we’re talking about fitters or welders. Out in the world, this is not at all a given. Here, we get so many good ideas for developing our operations from our own employees. The motivation to move in a new direction is very real.”

Haapasalo refers to, for example, the company’s investments in robot welding. Welding is an outstanding example of a work phase that many workshops outsource to

countries with lower costs. Deere does the exact opposite. “We have been able to develop robot welding and, in turn,

keep production in Finland while remaining competitive. This is possible when the whole team is all pulling together.”

Functional relationshipsDeere’s factory manager values seamless co-operation with

educational institutions in the region – the North Karelia College, Adult Education Centre and University of Applied Sciences. Co-operation is realised in, for example, custom-tailored courses and specialist vocational qualifications. The company also invests in in-house training.

Thanks and a tip of the hat also go to other operators and stakeholders in the region.

“The City, Regional Council, regional business and enterprise developers - this region is exceptionally conducive to enterprise. We and regional businesses belonging to our supplier network are really heard and helped. It is this attitude in the Joensuu region that even gets company staff in Tampere a bit envious!”

Deere & Company is a global corporation, with a total of approximately 60,000 employees in 40 countries.

“Of course, it’s great that production for a global corporation like this is here in North Karelia. In fact, it’s a major source of pride for the whole city.”

Joensuu emerged victorious – thanks to its attitude

righT in The middle oF The markeT

Deere’s forestry machine production in Joensuu is ideally placed when it comes to the market. The export-driven company’s main market areas are the Nordic countries, Central Europe and Russia.

“Russia has growth potential – just in terms of transport costs, our location is excellent,” says Haapasalo.

Deere also keeps a close eye on market trends in South America and China. For example, although China has vast expanses of forest plantations, its harvesting technology is still in its infancy.

Haapasalo reminds that the

transport of a half-million euro forestry machine, even to a distant market, is not a major cost consideration. It’s the size of the market that matters – building new plants is only worthwhile if demand grows from the hundreds to the thousands. Deere forestry machines are currently exported from Joensuu to, among others, Australia and New Zealand.

Future development needs include tightening emissions restrictions on forestry machines. When continuous development is the order of the day, the biggest challenge is improving productivity.

Photos: John Deere and Fabrik 13

Kareline® composites – environmentally-friendly and recyclable The composite material combines the best

properties of natural fibres and plastics.

Kareline® materials are thermoplastic

composites. The fibre contained in

environmentally-friendly softwood pulp

is used to provide strength and pure, select

thermoplastics are used as a matrix plastic.

Kareline’s properties make it well-suited for use in injection-moulded products, with an extensive range of applications.

Because there is no shrinkage of the composite during the injection moulding process, the material can also be used to make extremely thick-walled products.

Products made using Kareline natural fibre composites have an appearance and surface like natural materials. Particularly in consumer products, look and feel mean a lot.

“The Kareline materials are often mistakenly confused with WPCs (Wood Plastic Composites). WPCs are primarily used as a substitute for standard impregnated wood. Wood powder or sawdust is used as the filler to keep costs low. But this also makes the product’s mechanical and durability properties weaker than when using cellulose fibre,” explains Plasthill Ltd managing director Esa Kaasinen.

Kaasinen also stresses that the fibre used in Kareline materials actually serves to strengthen the raw material.

“In that sense, Kareline could be compared to fibreglass-filled materials. They’re strong, but they also avoid the disposal problems of fibreglass-reinforced materials – Kareline composites are environmentally-friendly and recyclable; they don’t contain any environmentally hazardous substances. Natural fibre products can

be reprocessed in production or used to produce energy by burning. Kareline composites leave only a small carbon footprint.”

Biodegradable or “biodegradable”?Consumers demand the use of environmentally sustainable materials. In Kareline materials, some of the fossil raw materials are replaced with natural fibre from the forest. The ethical significance is emphasised: natural fibre composites do not take arable land from food production. On the contrary, sugar cane or corn are used in bioplastics without qualm.

“When I think back 10-15 years ago, I never would’ve believed that value-based matters would sometimes weig h so heavily,” Kaasinen admits.

Companies have listened to the consumers’ voices and environmental consideration have found their way into marketing communications. Unfortunately, in the excitement of things the truth can be blurred sometimes, with concepts getting confused. Based on the marketing message being conveyed, a consumer buying a bioplastic product thinks they are being environmentally conscious. But not all bioplastic products can be composted, because they behave like standard plastics.

“There are several grades of Kareline natural fibre composites. W also manufacture a fully-compostable Kareline PLMS material,” says Kaasinen.

Plasthill has long taken environmental matters into consideration. The company was the first Finnish company to use “green electricity” in its production.

the fibre used in Kareline materials serves to strengthen

the raw material

14

“The BesT parTs oF The sTory are yeT To come”

Plasthill Ltd surprises the visitor. The production facility is most definitely not located in anything resembling an industrial area – it is instead nestled quite nicely in the rolling landscape of North Karelia. Company founders ArjA and Esa KAAsinen moved from Southern Finland to Pyytivaara, Kontiolahti in the mid-1990s.

“We began looking into starting a business, investigating whether there were any possibilities for contract manufacturing. We soon found ourselves in a position where our former employer outsourced injection moulding production to us. That served as the foundation on which we later built everything else here,” explains head of finance and administration, Arja Kaasinen.

When Kareline merged with Plasthill in early 2011, the production facilities were restructured. Kareline was already an internationally renowned name, as the company had marketed its product well. Now, it was Plasthill’s turn to add value to the whole.

“Kareline had previously been nothing but a manufacturer and seller of the material. Plasthill can offer the customer the full package: we can be involved in mould design, mould procurement and making test runs. We can tailor the material to precisely meet the customer’s needs. And if the customer doesn’t have its own manufacturing capacity, we can even take care of the manufacturing,” says Kaasinen.

Esa Kaasinen knows from experience that bringing new innovations to market is a challenge, because the threshold for the customer adoption must be kept as low as possible.

“The plastics industry follows a pretty conventional approach – no one really

wants to talk about experimentation. As the next generation is taking over, the situation seems to be changing,” he says with a smile.

And there’s a good reason for that smile – the company has managed to establish promising contacts in Finland and abroad. Recently, the Kaasinens sat down with some technical personnel and product designers from a large corporation. At the same time, a Japanese knife manufacturer would like to use North Karelian natural fibre composite in the handles of its top-of-the-line knives.

Plasthill has marketed its products at, for example, international trade fairs. In January it makes its way to moscow and on to Dusseldorf in October.

When it comes to materials development, Finns easily keep up with the rest of the world. The new raw material has enormous potential. According to the entrepreneur couple, working in co-operation, the natural fibre composite could make a real international breakthrough.

“The Kareline material is good, but we’re still very small as a sole supplier. If there’s an interested party out there--someone bigger, stable and wanting to grow—we’ll gladly meet you with open arms! The best parts of this story are yet to be told,” says Arja Kaasinen, throwing down the gauntlet.

Plasthill Ltd Family-owned company founded in 1996 Specialises in injection moulding and natural fibre composites

Turnover: approx. EUR 1 million Employees: 7-9 Development of natural fibre composites began in North Karelia at the beginning of the 2000s

Kareline Ltd started the first commercial operations

In 2011, Plasthill Ltd acquired the production line and trademarks for Kareline Ltd natural fibre composites

www.plasthill.fi

Photos: Plasthill

The Kareline composite material is well suited to injection moulded products, with a wide range of raw material applications. In material development, Finns easily keep up with the rest of the world.

15

Iivari Mononen - putting service in pole positionThe pine pole is an engineered product that can last as long as 60 years.

Europe’s largest pole producer, Iivari Mononen Oy, gets the raw material—

stout Finnish pine—for its poles from the forests of North Karelia, Kainuu,

North Savo and Central Finland. The 60-year-old company is now building a

service business around its pole production.

16

Iivari Mononen Managing Director Ari Mononen has had a challenging year. The company’s 60th anniversary

celebrations brought with them a great deal of extra work. The last thing the company needed was the upheaval caused by last year’s Arab Spring, but North Karelia hardly pulls the strings in world politics.

“Due to the uprisings and restlessness in the Arab world, we lost some 15 million euros from our budgeted turnover last year. This year, we’re back on track for growth. However, we still needed to make some adjustments last year,” says Mononen. The key Syrian market dried up, but Libya is now in a much better position.

These trials really put the business to the test. Mononen steered the company through the challenges, counting on the strength of his family business.

“A family-owned company has such great value. We can forget about bureaucracy and do things out of passion! This positive drive influences each and every employee.”

Cherry pickingThe overwhelmingly largest business area at Iivari Mononen is pole production. Pole production accounts for as much as EUR 30 million of the company’s approximately EUR 35 million turnover. The company offers 350 different pole products, with pole lengths ranging from 7 to 24 metres. The range of base and top diameters is wide. Raw materials are supplied by the company’s own wood procurement organisation. The quality requirements for pine are high: the trees must be slow-growth, dense, strong, sound-knotted and

straight. Mononen estimates that a single procurement supervisor marks a p p r o x i m a t e l y 25,000 poles each year. Trees are individually selected—cherry picked, as only the best will do—primarily from privately owned stands and, for example, those owned by Metsähallitus. The pine trees are 70-100 years of age. There are plenty of trees available in the company’s procurement area.

In production, the trees are debarked, dried and processed, perforated, notched, marked and treated for rot protection or impregnated, all according to the customer’s specifications. The company’s primary customer segment is power companies. Key customer countries include Great Britain, Norway, Sweden, Finland, Libya and Oman.

Becoming a service organisationThe European market forms the core of the pole production business. The Middle East and Africa are a welcome addition – the cherry on top of the cake, as Mononen says. In the future, the company will invest heavily in developing a service business. The production and sales oriented company is well on its way to becoming a service organisation.

“When it comes to competition, the one who can offer customised service wins. Service involves everything that can be done during the service life of a pole,” sums up

Mononen, adding:”In the Nordic

countries, the Baltic countries and Great Britain, we deliver poles directly to the worksite, placed

every 50 metres. All that’s needed is a machine to drive them in. This is a major departure from the past, when the poles were delivered to a central depot, where the customer picked them up with their own vehicle.”

The recycling of poles is already part of the company’s service concept. According to Mononen, a warranty period, inspections and maintenance might also be included in the service package. Power line planning, which would require the company to also possess expertise in electrical engineering, would be a natural fit for this service package.

Iivari Mononen Ltd Founded in 1952 Third-generation family ownership Turnover approximately EUR 35 million Employees: 69 Wood pole production plants in Höljäkkä (Finland) and Ilseng (Norway) Pole sales company in Great Britain Sales offices in Gothenburg and Munich Impregnated wood business handled by subsidiary Prima Timber Oy; primary market area - Finland

www.iivarimononen.fi

“When it comes to competition, the one who can offer

customised service wins.”

<<< From left: Donald Clark, Raimo Laatikainen, Iivari Mononen, Raili Mononen and standing in back Asko Laatikainen in 1954.

>>> The company is moving aggressively toward becoming a service business. In the future, the service package may include a warranty period, inspections and maintenance as well as line planning and expertise in electrical engineering, on the whole.

Photos: Iivari Mononen 17

Riikonen built a service entity from a network

“The most important parts of the

service are well in hand,” states

Konekorjaamo Riikonen managing

director, Juha Riikonen. He is

referring to the ambitiously built

co-operative network. In creating

the concept, the model landed

Riikonen a long-term client -

John Deere Forestry Oy.

Economic trends at the close of 2012 are shaking up Europe. As usual, the forestry sector is the first to

suffer the consequences. Konekorjaamo Riikonen managing director Juha Riikonen is calmly observing the big picture. Over the decades, the family-owned company has demonstrated its flexibility - having operated in close contact with its clientele for 30 years, the company has learned how to respond to changes quickly.

“The forestry sector has been our daily bread. Indeed, the industry has become more hectic, with greater emphasis placed on logistics, quality and cost efficiency.”

Konekorjaamo Riikonen’s partnership with John Deere really began in 1999, when both companies saw the opportunities that co-operation would provide.

“Deere has served as a positive driving force, also helping us a great deal in our own development work. It was through them that we adopted our own philosophy of efficiency and quality.”

Internal networkOne of the operating approaches adopted by Riikonen is to establish a network-like co-operation. Juha Riikonen is

Timber transport equipment is manufactured and sold under Konekorjaamo Riikonen’s proprietary RIIKO brand. The company is eyeing the Russian market for its RIIKO product line.

18

talking about his company’s internal network. The operational cornerstones are Konekorjaamo Riikonen’s machine repair shop and the actual workshop itself. The machine repair shop is one of the largest private heavy-duty equipment repair shops in Finland.

The repair shop concept is based on project deliveries geared toward the customer. Riikonen supplies, among others, frame manufacturing parts intended primarily for forestry machines. Other customers include companies and private persons operating in the forestry and excavation sectors.

Riikonen’s ser vice offering is supplemented by Teräspalvelukeskus (Steel Service Centre) in the Sirkkala district of Joensuu, welding specialist NC-Welding Ltd, and Joensuun CNC-Machining Ltd, which specialises in the precision manufacture of various machine and hydraulic parts. NC-Welding is owned by Riikonen, while the majority shareholder of CNC-Machining is Petri Holopainen, who founded the company in 2007.

“A physically close and network-like operating approach was considered a key competitive factor. Our customers’ order-delivery times are so tight that there’s no way we could possibly ship parts in different work phases – even within our own region,” explains Riikonen.

Quality and assured delivery“Quality and efficiency must be kept foremost in mind the whole time. The company is trending upward - we’ve been constantly moving up in small steps,” explains Riikonen. “We have to stay on this course, because competition is fierce,” he adds “We’ve got competition from, for example, Poland, Slovakia and the Czech Republic – the cost level in these countries is currently far below that of Finland.”

”We can’t do a thing about the price levels in Finland, but we can develop our own production to save on costs.”

Russia – land of opportunityKonekorjaamo Riikonen also offers its own RIIKO brand line of products. Years of experience in machine repair operations has been refined into timber goods equipment. According to Riikonen, the market prospects for RIIKO products in Russia are a clear opportunity for the company.

“The Russian economy is doing quite well, they have plenty of forests – why wouldn’t there be some space on the market for us?”

Years of experience

has been refined into timber

goods equipment

Konekorjaamo Riikonen Oy Founded in 1981 Core business: machine repair shop and engineering workshop Owned by brothers Juha, Jari, Timo and Keijo Riikonen Production facilities: approximately 6,000 m2 at Helatie, Joensuu and approximately 3,000 m2 at Sirkkala Employees: 65 Turnover for 2011 approximately EUR 13.5 million

www.konekorjaamoriikonen.fi

Photos: Fabrik and Konekorjaamo Riikonen

Konekorjaamo Riikonen has worked in close co-operation with John Deere Forestry Oy since 1999. Quality, efficiency and operational development are crucial factors in a fiercely competitive market.

19

Putting it all together like tongue and groove

Liperin Höyläämö managed to build a successful brand name product of interior

and exterior panels. This is quite an achievement, considering that there is surplus

production of milled lumber in Finland. According to Tomi Pulkkinen of Liperin

Höyläämö, their success is due to quality, agility and, finally, sales skills.

20

Liperin Höyläämö Ky Family-owned company founded in 1982 Specialises in interior and exterior panels and building frame materials Raw materials: pine and spruce Employees: 9 Turnover: EUR 3 million Investment plan slated for completion by 2016

www.liperin.fi

Wood has so many

excellent properties that consumers

appreciate

There are once again

plans to expand

Photos: Liperin Höyläämö

There is still room to grow on the family-owned company’s grounds at Liperi, even though new

production facilities were gradually added on several occasions after the family gave up farming. And room they will need, as there are once again plans to expand.

“The new production hall and its equipment are planned for completion by 2016. We’re talking about a 2.5 million euro investment,” says head of sales and marketing Tomi Pulkkinen.

At present, 90% of the company’s output is sold domestically. The rest is exported, primarily to Denmark. The turnover for 2012 is approximately EUR 3 million, which represents an approximate increase of 20% over the previous year. The goal for the coming fiscal period is to reach the EUR 4 million mark.

Lessons from the recession Liperin Höyläämö was founded 30 years ago. Strong traditions predate the founding of the company: family patriarch Erkki Pulkkinen was well-known for his circular saw. His son, Asko Pulkkinen, built upon this when he added a planing machine. Sawing operations were phased out at the beginning of the 1990s.

“We get our raw materials mainly from domestic sawmills. In addition to panels, we also produce building frame materials, whose strength-graded wood is imported from Russia.”

Through diligent sales and marketing efforts, a market was found in Denmark. At its height, as much as 98% of the mill’s turnover came from the Danish peninsula of Jutland. But then the financial crisis hit and overheated markets began to evaporate.

“ The entire country went down – Denmark was suddenly stuck with 50,000 unsold houses.”

This meant layoffs for the family company – for a time, the mill was run solely by the family members. Turnover dropped below EUR 500,000.

“We started trying to sell our white-waxed panels, which had sold quite well in Denmark, here in Finland. We quickly realised that we wouldn’t conquer the Finnish market with that product alone.”

Stress on serviceThe mill expanded its product range to include exterior panels and other wood products. A great deal of progress has been made in the development of key interior panel products. In March this year, the company will introduce a new pearlescent product for saunas.

Liperin Höyläämö sells its products through Finnish hardware and lumber stores. The Liperi brand can be found at such retailers as Starkki, Rautia, K-rauta and Puukeskus. The company strategy has been further defined, with a greater emphasis on product quality and customer-oriented service.

“Our big competitors look to make their margins with large lots and logistics. In addition to logistics, we decided to stress a more customised service. We divide outgoing shipments into smaller lots – the customer shouldn’t have

to order the same product all at once by the truckload. We would rather ship the products, colours and quantities ordered by different customers together in a single load.”

This flexible concept has been very well received on the market.

Rapid responseThe rainy summer of 2012

increased the mill’s workload. Extreme care must be taken when it comes to the quality of raw materials. At the same time, a poor harvest season reduced the availability of timber. In a highly sensitive business, uncertainty factors are

like balls being juggled in the air: a fluctuating economy and its impact on construction, a wet harvest season, the quality of raw materials and, finally, the opinions and requirements of end customers. There is an approximately three-week order backlog cycle. Pulkkinen, however, is looking for the silver lining.

“Experience with risk and uncertainty is an advantage. A positive attitude will take you far. We have an outstanding location – we’re right in the middle of the best forest area, with a couple large pine sawmills within a 200 kilometre radius. And where our Russian import timber is concerned,

that connection is close, too. Even if new construction were to slow down, the repair need for existing building stock is enormous,” sums up Pulkkinen.

A p os itive atti tude also finds opportunities in consumer preferences.

“ Wood has so many excellent properties that

consumers appreciate: a natural feel, breathability, a small carbon footprint. Treated interior panels add Scandinavian style and elegance. These values will be further emphasised in the future.”

21

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“We never lost faith,” exclaims Nordic Koivu Ltd

Executive Vice President Susanna Maaranen,

while preparing for a sales trip to the Far East.

Maaranen is off to market the North Karelian

birch sap with a greater sense of confidence.

Birch sap collection has achieved a volume

level, and the production facility, which was

completed in 2010, has plenty of capacity.

Susanna Maaranen pops open a bottle of birch sap and offers her guest a taste. The fresh, mild beverage is enjoyed as

it is. The birch sap contains, among others, fructose, glucose, fruit acids, amino acids, vitamin C, potassium, calcium, phosphorous, magnesium, manganese, zinc, sodium and iron. Birch sap is a genuine natural product, whose potential applications on the global market are limitless.

“Arthritis treatment, problems in the urinary tract and kidneys, flushing out the body, helping with weight control, treating birch allergies – birch sap has been used for a variety of purposes throughout history. History books even tell of a French physician in the 1700s prescribing birch sap to get rid of cellulite.”

A genuine innovationNordic Koivu Ltd owners Susanna and Arto Maaranen stumbled into the birch sap business quite by accident. Looking for a change, these city folks packed their bags and moved out into the country. The yard at their new home in Tohmajärvi had a magnificent stand of birch.

“Birch sap was known to be a healthy natural product, and no one here had made a business out of it yet. While looking out over the birches, we started thinking that there has to be some way to develop it.”

The enterprising couple laid their hands on everything they could find about birch sap, with research data and information on traditions dating back even centuries. At the same time, they talked to various equipment manufacturers all over the world. A major challenge was that they could not find one person

22

Birch sap

In the spring thaw, the birch wakes from its winter slumber and begins drawing water from the earth. minerals as well as fructose and glucose, which the birch stored during the previous autumn, are absorbed along with the water.

The thicker the birch stand, the bigger the harvest. It has been found that birch sap is more flavourful in drier growing areas.

The birch sap collection season is very short. Susanna maaranen recalls that the shortest collection season was 14 days and the longest 28 days. Every spring is different.

Birch sap is highly perishable. A very high level of expertise is required in the processing, storage and refining of birch sap. Using Nordic Koivu’s proprietary collection and production method, birch sap can be kept for two and a half years in an unopened bottle. Once the bottle has been opened, the birch sap will keep for 3-4 days. Indeed, its unparalleled product makes Nordic Koivu the world’s leading producer of birch sap.

Collecting birch sap does not kill the tree – birch sap can actually be collected from the same tree for even tens of years.

Photos: Nordic Koivu

"The international cosmetics

industry uses Tohmajärvi

birch sap in its products."

Nordic Koivu Ltd Started operations under the name “Aurinkolehto” in 1996. Producer, researcher and developer of birch sap Turnover: just under EUR 1 million 97% of production goes to export; Primary market area: Central Europe Developed a birch sap collection and production system unlike any other in the world New production facilities at Tohmajärvi in North Karelia completed in 2010

www.nordickoivu.com

anywhere to advise them on the best approach to producing birch sap. The Maaranens installed their first version of an automatic collection system and bottling line in 1999.

“We continued developing the process and suffered several setbacks, but we never stopped believing that we would succeed. I guess it was just our natural stubbornness,” recalls Susanna Maaranen.

Award-winning and sought-afterThe Maaranens brought their first birch sap products to market in 2000. In 2002, they won the national Innosuomi award for innovation. Demand on the export market grew. Consumers wanted to purchase the birch sap both bottled and as a raw material in, for example, cosmetics and foods.

“We were in Japan at the beginning of the 2000s. A local brewery was extremely interested in using birch sap as a raw ingredient for beer. We really wanted to sell them our product, but when we discussed quantity, the client said we would only be a drop in their amber sea.”

The same situation happened again with a global soft drink producer. It became necessary to roll up the sleeves and increase the volume of collection and production.

New birch standsNordic Koivu developed a proprietary and unique—even by international standards—birch sap collection and production method. Through a regional project, work was begun three years ago

to increase the collection network and birch stand area. Birch sap collection is now handled by subcontractors, which have a season averaging three weeks in the early spring.

“We managed to get some crucial things in order: birch sap quality, an efficient collection process and quantities sufficient enough for major industries. We’ve become a credible business that can deal with major players,” she says.

Strong growthThe cosmetics industry in France, Switzerland, Japan and Korea already use North Karelian birch sap as an ingredient in their products. Consumers all over the world are ready to invest in their health and well-being.

“We are looking to expand on the industrial end of things. By no more than five years from now, Nordic Koivu will have grown well beyond its current size. New business opportunities are presenting themselves all the time. Major companies from Asia have contacted us, requesting offers on complete equipment deliveries. Exporting technology is another area of business, altogether, but who knows what the future will bring.”ge

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23

In a game of inches, quality counts

KME Oy provides warmth and employment

“Make the management of

a young forest profitable.

Do your first thinning just

a little bit earlier, gather

more timber and clear less

brush,” sums up Managing

Director Timo Kanniainen

from Karjalan Metsä ja

Energia KME Oy, addressing

forest owners.

Timo Kanniainen has talked countless times to forest owners about how there is no sense in putting off a

late first thinning and only waiting to cash in on pulpwood. There are ways of increasing your timber sale revenues even earlier. Energy wood is a new type of timber collected by KME from all harvest areas. Kanniainen is talking about more economical forest management alternatives.

“By contracting out for pre-clearing and selling only commercial timber, the forest owner’s profit may be close to zero. In the KME concept, pre-clearing is more streamlined and economical. On the other hand, the harvesting yields per hectare are higher when collecting both energy wood and commercial timber. As a result, the yields for the first commercial thinning might be considerably higher. A managed forest and savings on forest management costs

will keep increasing the profits throughout the entire forest rotation period.”

The message from this local energy provider has slowly got through to regional forest owners. Although the buyer still needs to be active, forest owners also offer tracts suitable for energy wood harvesting for sale. A majority of the wood comes from private forest owners. Deals are also made with such forest owners as Metsähallitus and Tornator Oy.

Plentiful forest resourcesKME operates in the Savo, Pielinen Karelia and Kainuu regions, surrounded by a wealth of forest reserves. The size of forest holdings in the region averages 50 hectares, whereas the average size of forest holdings elsewhere in Finland is in the 30 hectare range. The company purchases several different

types of energy wood and timber: full trees, stems, logging residues and commercial timber.

In addition to major district heating plants and municipal clients, the company also supplies fuel to numerous smaller customers, such as farms and greenhouses. The company’s products include wood chips, pellets, split firewood and delimbed stems for energy use.

Revenue for the region“There was a clear need for a local energy provider. The forest also already provides many here with work and remains a significant source of income. Forest owners, forestry machine contractors, transport and chipping firms all benefit.”

Kanniainen reckons that the benefits to the local economy more or less equal KME’s turnover, or EUR 2 million.

24

“A driver hauling a heating oil tanker leaves only a euro or two for a cup of coffee when passing through. With our concept, millions stay here to benefit our own economy.”

KME does not have its own heating plant – yet. According to Kanniainen, the conditions for building a heating plant are right - the strategy for the future in that regard is well thought out. Kanniainen also sees other directions for growth in the future.

“Wood chips might be a more widely used raw material in the future. Wood chips could just as well be refined into oil and burned to generate electricity.”

Relying on qualityEach year, KME chips standing deadwood trees imported from Russia for priming moist wood chip parcels. According to Kanniainen, litter is needed particularly when the summer is

rainy, in order to ensure an adequate level of wood chip quality for the customer. Quality is a real competitive edge for the company.

“A bidding competition is often a game of inches. Quality and good references mean a great deal to us. A heating plant has to work flawlessly, no matter how cold it gets. If you have to power down a heating plant and switch over to oil, the desire to buy suddenly dries up.”

The entire production chain is needed to produce quality. “We do things in the forest better,” states Kanniainen bluntly.

According to him, all actors in the supply chain understand the importance of quality. If one of them lets quality slip, it will affect the income of everyone in the chain.

”We deliver a consistent, pure and drier product. When it comes to bidding, we beat our competition on quality points.”

Energy wood is a new type of

timber collected by KME from all harvest areas

Karjalan metsä ja energia KME Oy Founded in 2007 Founded and owned by logging enterprises Motoajo Oy and Koneurakointi S. Kuittinen Oy Business idea: to control the entire energy wood supply chain, from forest to point of use at heating and power plants Supplies approximately 50,000 m3 of energy wood and commercial timber from Savo and Pielinen Karelia Annual amount of energy delivered: approximately 80,000 MWh Key customers: Municipalities of Valtimo and Juuka, Nurmeksen Lämpö Oy and Rautavaaran lämpöosuuskunta Turnover: approximately EUR 2 million Direct employees: 2 Provides work to machine, chipping and transport subcontractors Four machine chains work in the winter, two in the summer

www.kmeoy.fi

Photos: KME 25

When Managing Director Martti Toivanen mentions the ‘brothers’,

he is referring to Veli and Juhani Mantsinen. The company founders currently influence decisions through their involvement on the Board of Directors. Toivanen has manned the helm of the company for just over two years.

“The can-do attitude here is just amazing. We have no shortage of labour, with such a large pool of skills and expertise all around us. A clear advantage for us is the high level of machine building expertise we have here. That’s why the development of our supplier network has gone so well,” says Toivanen.

A new concept for Rauma2012 has given the company several reasons to celebrate. First and foremost, Toivanen mentions the co-operative agreement with Metsä Fibre Oy. The company’s Rauma mill is now a Mantsinen client. The Rauma pulp mill produces 630,000 tonnes of bleached pulp a year. Running at full capacity, the mill uses 3.3 million solid cubic metres of wood a year. Toivanen is especially pleased

that the competition for customers was won with a smart concept, not a standard price showdown.

“Previously, wood lot operations at the pulp mill were handled using log stackers. We offered a product with a new concept. The product is based on the idea that raw materials are now fed using an electrically-driven material handling machine. The power needed for the machine comes from the pulp mill – working together with the customer, we were able to come up with an energy-efficient solution. “

Toivanen calls the product offering a ‘one-touch tactic’, which can be used to improve and enhance the operating process.

Work for professionalsWith the signing of the Rauma agreement, Mantsinen hired over twenty new employees. There are now nearly 500 employees working for the company. Over 100 of the employees work at the Ylämylly plant and another 100 in logistics services. There are over 20 employees in the Baltic countries and 250 in Russia.

“We’ve organised our operations in

Russia so that they’re more efficient and more profitable. Svetogorsk, Sheksna pulp mill, Svir Timber sawmill wood lot operations, several wood terminals and harbours. Our situation in Russia is now very good. In terms of domestic logistics clientele, Rauma was an excellent addition to Stora Enso’s Uimaharju and Kaukopää facilities.”

Development of consultingThe demand for Mantsinen consulting services is on the rise. Toivanen uses the Syktyvkar mill of multinational paper and packaging giant, Mondi as one of the most recent examples. The need for consulting usually stems from, for example, production shutdowns caused by material handling, low inventories and material flow bottlenecks. Production plant investments often require a restructuring of material handling operations.

”We have much to offer from the experience we’ve gained through the years. We are ambitiously creating a consulting service product. The highest demand for this has been in Russia.”

Lots of room for innovation talk

“Mantsinen’s success has been based on innovation for its entire history, and the

innovative force of the brothers is still very much present and accounted for,”

says Mantsinen Group Managing Director Martti Toivanen. “The success story of

this logistics and material handling company has been going on for nearly

50 years, with a constant supply of new ideas for profitable growth.”

26

Mantsinen Group Pioneer in wood terminals, industrial and port logistics and material handling Company roots date back to the mid-1960s Business areas: logistics services, material handling machine manufacturing and consulting Group headquarters and production: Ylämylly, Liperi In addition to the parent company, Mantsinen Group Ltd Oy, the group also consists of OOO Mantsinen in Russia, AS Mantsinen in Estonia and SIA Mantsinen in Employees: approximately 500 Turnover for 2011 approximately EUR 53 million

www.mantsinen.com

There are now nearly 500 employees working

for the company

Expanding rangeThe first half of 2012 was outstanding for machine manufacture. However, as the economic situation tightens, the company should brace itself for a decline in the number of orders received.

“Indeed, customers will still need machines. But, understandably, investments must be made more carefully, and more time must be given to making decisions,” urges a realistic Toivanen.

Mantsinen began a comprehensive overhaul of its product range some three years ago. In 2012, the company launched the Mantsinen 70, a ‘little giant’ of material handling machines. By the end of the year, the company had also added the Mantsinen 90 to the product line-up.

The company closely follows customer preferences and, for example, changes in port operating practices. Electric motors have been added to material handling machines along with diesel engines. Wheel-mounted machines joined the ranks of track and rail-mounted models.

“Working approaches being used in ports had changed, where the machines were moving even long distances around

the port area. A track-mounted machine is, in that sense, not the most nimble solution. Mantsinen might be the only manufacturer offering a wheel-mounted machine in the 120 ton class.”

Profitable growthInnovation is a trademark of Mantsinen. The company introduces innovations carefully and profitably.

“Productisation—the combining of an innovation and commercial solution—is always a challenge. Sometimes implementing a solution can be too costly at a given time. Customers must be ready to pay for solutions in order to make a business out of them.”

According to Toivanen, growth is not a given that must be blindly sought by the company. He would rather talk about good sense and profitable growth.

“We have more potential than we know what to do with, but cost-efficiency must be kept foremost in mind. We’ve definitely found our own market segment. Our flexibility is one of our strengths. We can respond to customer needs and customised solutions relatively quickly, unlike mass producers.

Photos: Mantsinen

<<< Mantsinen is known throughout the world for its innovation and rock-solid machines. Product development is continuous, clientele is won with attitude and technical leadership.

27

vol. 2

F i n l a n d North Karelia

publisher: Joensuu Science Park Ltd

texts: Viestintä Ässä Oy, Sirkka-Liisa Salmela

photos: Photograph archives of enterprises and Mainostoimisto Fabrik Oy

design: Mainostoimisto Fabrik Oy

printed by: PunaMusta Oy

This publication was produced by the North Karelia Centre of Expertise and RoK-FOR-project.

Joensuu Science Park LtdLänsikatu 15, FI-80110 Joensuu

Tel. +358 13 267 7110 | info@carelian.fi www.carelian.fi

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